Conservation Easements

Development Rights: Purchase

Farm and Ranch Land Protection Program (FRPP)

Natural Resources Conservation Service (NRCS) can purchase an easement on farmland that allows participating landowners
to keep their land in agriculture, but not to convert the land for nonagricultural use.

Only available in counties that allow the purchase of development rights.

Farms must have prime, unique, or other productive soil, be privately owned, and large enough to sustain agricultural production.

The easement value is the fair market value minus the agricultural value.

Through the locality, the FRPP reimburses the landowner for the easement value. FRPP does not cover legal or other costs. Easement sale proceeds are treated like any other capital gain for federal, state or local income tax purposes. Some programs have provisions that allow for installment purchases or use securable tax-exempt bonds as a method of payment.

Priority is given to applications for perpetual easements, and a minimum of 30 years is required. All enrolled lands must have a conservation plan developed by an NRCS Field Office. This program is subject to annual congressional funding.

Forest Legacy Program (FLP)

In cooperation with the USDA Forest
Service, VDOF can purchase development rights on significant forestlands. The VDOF
gives priority to land that can be effectively managed for sustainable timber
production, important wildlife habitat, or for watershed protection. Long-term
costs of easement administration and easement compliance monitoring are a cooperative
effort between the VDOF and private nonprofit land trusts. All landowners must
have a Forest Stewardship Plan approved by the VDOF.

Purchase Development Rights (PDR)

State or local government purchase development rights
from landowners who would rather sell these rights than donate them. These
rights can be retired permanently or for a set number of years.

Transferable Development Rights (TDR)

Development rights are separated from a parcel of land and sold to a private
party, usually a developer, for use on another property. Rights are generally
transferred to an urban region with a high demand for development.

The local government allows this transfer by designating a “sending area” and
a “receiving area.” The sending area is generally a rural region
from which development rights will be “sent away”. The receiving
area is an urbanized region where those development rights are used. Local
governments decide where development rights can be sent from and what areas
can receive them.

Politically, a TDR program is difficult. Residents of the urban area where
the development is top occur may object to “added density” in their
neighborhood. The testament to the difficulty in creating a TDR program is
the popularity of PDRs and the relatively sparse adoption of TDR programs nationwide.
Elected officials and taxpayers would rather pay to purchase development rights
and retire them, than to transfer them to communities that don't want development
and will oppose the program.

The most obvious advantage of a TDR program is that the private sector, rather
than tax dollars, is paying for preservation of the parcel from which the rights
are purchased. The obvious disadvantage is that the number of new residential
units in the locality is not decreased, just moved. From the perspective of
long-term planning, it makes sense to transfer development rights to areas
that are already well served by highways, water and sewer.

The flexibility of these programs makes them popular among landowners, and
the retirement of development rights gives the greatest protection to the forest
land base. However many landowners do not feel comfortable in making these
decisions. Local governments often offer incentives and protection to landowners
that can resist developing their property in the near future.